Lumen Technologies (NYSE:LUMN) Issues Quarterly Earnings Results, Beats Expectations By $0.09 EPS

Lumen Technologies (NYSE:LUMN) released its earnings results on Wednesday. The technology company reported ($0.14) earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of ($0.23) by $0.09, reports. The business had revenue of $2.71 billion for the quarter, compared to analyst estimates of $2.73 billion.

Here are the key takeaways from Lumen Technologies’ conference call:

• Strategic sales and revenue accelerated: Strategic sales rose 30% year over year, while strategic revenue grew 10% to $1.28 billion and reached 55% of business revenue. Lumen added $700 million in PCF contracts, bringing cumulative deals to more than $13.5 billion.
• Digital services are gaining traction: Digital revenue increased 86.7% to $56 million, and NaaS adoption grew across customers, ports, and services. Management sees opportunities to add high-margin digital services to its combined Intelligent Internet business, which includes more than 100,000 ports and over $1 billion in revenue.
• Legacy declines continue to weigh on results: Total business revenue fell 4.5% year over year, while free cash flow was negative $76 million in the quarter. Total revenue of $2.72 billion included $27 million in government support payments that did not benefit Adjusted EBITDA.
• Full-year guidance was reaffirmed, but revenue growth remains a longer-term goal: Lumen expects 2026 Adjusted EBITDA of $3.1–$3.3 billion and free cash flow of $1.9–$2.1 billion, excluding specified items. Management continues to model a return to total business revenue growth in 2028.
• Copper decommissioning is intended to generate cash while reducing legacy costs: Lumen estimates $1–$1.5 billion in pre-tax net proceeds from copper over five years, with the initial four states representing about a quarter of its footprint. The proceeds depend on factors including customer migration, regulatory approvals, recovery costs, and market conditions.

Lumen Technologies Trading Down 11.0%

NYSE:LUMN traded down $0.49 during trading hours on Thursday, hitting $3.98. The company’s stock had a trading volume of 25,235,231 shares, compared to its average volume of 13,732,415. The stock has a market capitalization of $4.10 billion, a P/E ratio of -3.90 and a beta of 1.94. The stock has a fifty day moving average of $5.66 and a 200-day moving average of $7.19. Lumen Technologies has a 52-week low of $3.84 and a 52-week high of $11.43.

Analyst Upgrades and Downgrades

A number of analysts have recently weighed in on the company. The Goldman Sachs Group cut their price objective on Lumen Technologies from $7.25 to $5.00 and set a “neutral” rating on the stock in a research report on Thursday. Citigroup decreased their target price on Lumen Technologies from $10.00 to $8.25 and set a “neutral” rating for the company in a report on Tuesday, August 11th. JPMorgan Chase & Co. lowered their target price on Lumen Technologies from $7.00 to $6.00 and set a “neutral” rating for the company in a research note on Thursday. Moffett Nathanson raised Lumen Technologies from a “sell” rating to a “neutral” rating and set a $4.00 target price for the company in a research note on Friday, October 30th. Finally, Weiss Ratings restated a “sell (d-)” rating on shares of Lumen Technologies in a report on Friday, July 17th. Ten analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the company has a consensus rating of “Reduce” and an average target price of $6.53.

Key Lumen Technologies News

Here are the key news stories impacting Lumen Technologies this week:

• Positive Sentiment: Strategic revenue grew about 10% and reached 55% of total revenue, reflecting demand for AI-related connectivity and Lumen’s Network-as-a-Service offerings. The company reaffirmed its full-year adjusted EBITDA guidance. Lumen Q3 earnings call highlights
• Positive Sentiment: Lumen’s adjusted loss of $0.14 per share was narrower than analysts’ estimates, offering a bright spot in an otherwise mixed quarter. Why Lumen Technologies Sank Today
• Neutral Sentiment: TD Cowen, Goldman Sachs and Wells Fargo lowered their price targets to $8, $5 and $5, respectively, while maintaining hold, neutral or equal-weight ratings. The targets remain above the stock’s cited $3.98 price, but the reductions signal more restrained expectations. TD Cowen rating
• Negative Sentiment: Revenue was approximately $2.71 billion, just below consensus, and reports noted a year-over-year decline. The shortfall and ongoing pressure on Lumen’s legacy business overshadowed strategic-revenue growth. Lumen Q3 adjusted loss narrows, revenue falls
• Negative Sentiment: Free cash flow turned negative, raising concerns about cash generation even as the company works toward its profitability goals. Together with declining overall sales, this helps explain the negative reaction to the results. Lumen Q3 earnings call highlights

Lumen Technologies Company Profile

Lumen Technologies, Inc is a communications and technology company that provides network, connectivity, cloud, cybersecurity and managed services primarily to businesses, government organizations and wholesale customers. Its offerings include fiber-based internet and data transport, software-defined networking, network security, unified communications, voice services, edge computing and related information technology solutions.

The company operates one of the largest enterprise fiber networks in the United States and also serves customers internationally through its global network and wholesale operations.